Improving Transport Project Appraisals
In the Islamic Countries
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Lithuania has recently put in place a strongly centrally coordinated system which defines, for a
list of 14 sectors, including transport, unit values for 89 economic benefits and externalities, as
well as a number of conversion factors for the most typical input (such as for example utilities,
land, equipment, labour) which are updated on an annual basis in line with official statistics. The
same is done by Chile where the central planning agency annually determines the shadow prices
of labour (skilled, semi-skilled and unskilled), discount rate and other shadow prices commonly
used project appraisal. In the case of transport this includes for example shadow prices of fuels,
lubricants, tires, new vehicles, maintenance and the social value of travel time.
Being the sector with the longest tradition of project appraisal, transport can enjoy a number of
programmes, initiatives and academic review that, building on meta-evaluations or on primary
data collection and processing, provide standard values that, even if not binding by law, are
widely accepted as official international reference. A number of them are provided at the EU
level, such as the Harmonised European Approaches for Transport Costing (HEATCO)10 for unit
values of transport benefits or the ExternE 11 for external environmental costs or the meta-
analysis presented in Wardman et al (2016).
Ad 3) Tools and guidelines
The existence of a general guidance document developed at central or local level to assist the
appraisal performer with formal indications (and reference values, in case) is an important
element of the system which not only can facilitate the work of the analyst, but also serve the
goal of increase comparability by standardizing the analysis. This based on standards, as
described above.
A sector-specific toolbox may exist as well, either in addition or as an alternative to more general
guidelines. Examples of general guidelines applied to all sectors are the UK Green Book or the
EC Guide for CBA (more on this can be found in Chapter 3). Also, international organisations
such as the Asian Development Bank (ADB) have adopted own guidelines for project appraisal.
In the EU context, national authorities were encouraged to develop own guidelines and reference
value. As a reflection of this recommendation, many EU Member States, especially those with a
more recent tradition of project appraisal such as Malta, Lithuania, Poland, Hungary and
Romania, have developed national guidelines that are now applied also to projects funded by
national budget. Some of them are at the sector level (the Polish so-called ‘Blue Book’ is the most
notable example). Sectoral guidelines are quite common in the transport sector as compared to
other sectors.
Guidance documents sometimes only establish common principles for project assessment. In this
case, the appraisal performer enjoys a lot of flexibility in conducting the analysis. Alternatively,
more elaborated and practical guidelines may be more prescriptive and detailed, also providing
unit values (e.g. the value of time) and other parameters such as discount rates or shadowprices.
10 See for example HEATCO, (2006). Developing Harmonised European Approaches for Transport Costing and Project
Assessment, Deliverable 5, Proposal for Harmonised Guidelines, IER, Germany.
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